The UK currently has a relatively vibrant economy. Yet the potential exists for it to add an additional £479 billion to its GDP by supporting all of its regions to reach the G7 average economic output per hour. Improving exports, stimulating businesses to upskill their talent as well as improved value alignment with a new generation, are all key factors that stand at the heart of the UK’s long term success story.
In a new article that explores the growth potential of the UK, Grant Thornton leverages analysis by Centre for Economics and Business Research, as well as data from, among others, the Office of National Statistics (ONS), Department for Business, Innovation and Skills (BIS) and a YouGov survey (1,000+ senior decision makers) to delve into areas where the UK economy could improve.
According to the research, much of the UK has considerable potential to add additional gross value added (GVA) to the UK economy – if it manages to reach the same level of economic output as the G7 average (excluding the UK). The total value of the untapped potential derived from best practice modelling, is placed, by the firm, at a staggering additional £479 billion by 2025.
Sacha Romanovitch, CEO of Grant Thornton UK, says: “Today’s research has revealed significant potential across the UK. We believe that addressing at root some of the UK’s fundamental social and economic challenges collaboratively can create vibrant cities and communities across the UK, where businesses and people can flourish.”
Exporting value and building skills
One area that provides a source of considerable added value is export. As it stands, the UK lags considerably behind Germany in terms of exports as a % of GDP, with a score of 28% versus 45%. Increasing focus on improving the export potential of the country to that of the level of Germany, has the potential to add £84 billion to the country’s economic output. The study finds that many organisations do not currently consider the potential benefits of expanding their operations into overseas market. One area in the UK doing particularly well in this area is the West Midlands.
An additional area in which considerable value may be won for the UK is if businesses invested in the development of staff – rather than bemoaning that talent either lacks necessary skills or are scarce in the first place. Businesses see, according to Grant Thornton, 70% of their future success dependent on attracting the right talent, and they therefore are advised to reconsider how future talent is developed. The article highlights that 54% of business believe that retention and development of their current staff is important to their growth – suggesting also that more can be done within businesses themselves to train and develop the potential of talent already on board – particularly within the female segment.
By 2020 around half of all workers will be millennials; currently millennials make up around a third of the workforce. A recent study highlights that millennials have different, and more firmly set, values than previous generations. Millennials choose employers whose values reflect their own – a concept reinforced by the finding that, globally, 56% of Millennials have “ruled out ever working for a particular organisation because of its values or standard of conduct.” The article cites research by the Edelman Trust Barometer, which shows that business’ contribution to the greater good has become a leading value for trust in that business. The survey further found that 27% of businesses place importance on having a positive impact on their local community or wider society and 39% of businesses view transparency and good governance as a necessary part of success.
The research highlights that for a number of businesses, around 15% of those surveyed, the source of their success boils down to four main essentials: their impact on society, on the environment, the development of their employees and making profits. 88% of those businesses were found to be in a better position to grow in the next 12 months, compared to 66% for all businesses.
Other major areas where best practice modelling – bringing the UK economy up the top-tier average – could add significant GVA include infrastructure management, healthcare and public sector efficiency.